Tesla Model 3 (Source: Tesla)
Tesla has reduced the price of Model 3 RWD Long Range, a newly launched version of the popular Model 3, in the middle of a sales decline.
As we reported last week, China has reached a rocking point for EV -Recovery: Most of the sales of new cars are electric.
Still, Tesla, once the biggest EV company in China, does not benefit from the increase in EV sales in China.
From last week, Tesla’s sales in China are down with 6.3% year to date based on insurance registration data compared to 2024.
Electric vehicle competition intensifies and Tesla is struggling to keep up.
Over the past few weeks, Tesla has launched two new versions of Model 3 and Model Y to help dampen the fall in China.
For Model 3, Tesla launched a new RWD version in long range in early August for 269,500 yuan.
Today, the Tesla cut the price with 10,000 yuan only weeks after launch – indicating that demand was lower than expected.
In addition, Tesla also offers a number of incentives at the top of the price reduction:
- Join the referral bonus promotion and place an order before September 30 to receive an 8,000 yuan bonus on optional paint.
- Order Select Models (excluding high-priest four-wheel drive version) before September 30 to apply for a limited time 5-year 0% Interest financing plan. Order
- Select models (excluding High-Performance All-Wheel Drive version) and receive delivery before September 30, along with partner insurance to receive a limited time of 8,000 yuan.
Competition in the EV sector is fierce in China. New models are launched every week and prices are incredibly competitive.
Tesla is still doing well in the premium segment, but its most popular models are by far the cheaper model 3 and model Y in RWD versions. Meanwhile, Chinese EV car manufacturers have launched several vehicles in these segments.
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Add this to the many red flags regarding Tesla’s falling sales around the world.
For Tesla, Europe is almost a saga of the past. China is in a constant decline, while the United States is expected to experience only a small growth.
The level of competition in China is simply too high, resulting in Tesla selling many vehicles in the market for almost 0% gross margin.
This is not sustainable and is likely to result in Tesla starting to lose money in 2026 without any major changes.
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